Tuesday, May 31, 2011

The Business Model

I did get a chance to sit down with Brian from LuckyGunner and talk about Logistics.  Having spent many years working in the field, I'm always interested in the nuts and bolts of how a company does what they do.  Getting the stuff from the manufacturer to the customer or end user is the heart and soul of most businesses.  The more effective and efficient you are at doing that, the better you take care of your customers and ergo, the more profitable you are.  Many businesses make or break on how well the do the behind the scenes work to "make it happen".

As a caveat here, I will point out that 1) I mostly shoot shotgun; trap, skeet, sporting clays; so 2) I reload mostly shotgun, tailoring my loads to me and the game (to include most of my hunting loads) and the gun.  3) What metallic (Rifle/Pistol) cartridges other then .22LR, I do shot, I also generally reload; .45 ACP, .38 Spl, .32Win Spec. So I haven't ever ordered from LuckyGunner.com

Having said that, here is the business model in a nutshell.  If you see it on their website, it's available to order.  They put their inventory on-line.  WYSIWYG.  Wisseywig is how that's pronounced.  What you see is what you get.  There is no such thing a as back-order.  You click on a caliber or type of ammo and it tells you right there how many they have.  The good news is that you can't over order.  However, the bad news is that if it shows fewer boxes/cases/flat then what you want, you can only get what they have in-stock.   This is a challenge for the management of LuckyGunner.  Inventory sitting on a shelf is the same as money sitting on a shelf.  If you by X ammo, you can't by more Y ammo, until you sell X and then take that money to by Y. Therefore, it is a constant balancing act of trying to figure out what the customers want and having that product on the shelf when the customer wants it.  Having past order history and trends allows them to somewhat predict what they need and then order from the manufacturers.  However, the manufacturers may not have what the models or sales trends predict they need to have.  So they are constantly looking at their inventory and projecting what they need to buy, based on what they are selling and what they project to sell.

Is it prefect.  No.  No system is.  Simply because the market is constantly changing and what was selling like it was going out of style last year, has gone out of style, and now you are stuck with a ton of it on your shelves.  Again, that's money that tied up that you could be using to buy inventory that could be making you money rather then just sitting on the shelf, mocking you and your bad decision making. 

What does that mean for you the shooter/customer?  It's not your problem.  You look at what they have and buy it.  Your order ships complete.  There are no partial orders.  You pay only one freight charge, not multiple ones for two or more shipments.  And there is no frustration of having to wait days/weeks/months waiting for ammo.  All the headaches are on LuckyGunner.

And having met them this weekend, I can attest that they are customer focused, and want to earn your business.

They get the Scout26 stamp of approval.

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